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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
PER D. KARUNAKARA RAO, AM:
This is the appeal filed by assessee against the order of CIT(A)-10, Pune, dated 09.02.2016 for the A.Y. 2011-12.
The solitary ground raised by the assessee reads as under :
“1. On the facts and in the circumstances of the case and in law, the Lower Authorities has erred in levying penalty u/s.272A(2)(k)/274 r.w.s. 200(3) of the Income Tax Act, 1961 a sum of Rs.40,000/-by not considering the reasonable cause in filing the TDS return belatedly.”
Briefly stated relevant facts of the case are that the assessee filed its return of TDS u/s.200(3) in Form No.24Q for the 4th quarter of F.Y. 2010-11 on 18.06.2012 as against the statutory due date of 15-05-2011. Thus, there was delay of 400 days. AO treated the assessee
2 ITA No.1124/PUN/2016 Samal Construction P. Ltd.
as assessee-in- default and invoked the provisions of section 272A(2)(k)
and levied penalty of Rs.40,000/- .
Being aggrieved by the order of AO, assessee filed an appeal before
the CIT(A). The CIT(A) after considering the submissions made by the
assessee and discussing the provisions of section 273B confirmed the
penalty levied by the AO.
Aggrieved with such order of the CIT(A), the assessee is in appeal
before the Tribunal with the ground extracted above.
At the outset, before us, Ld. Counsel for the assessee brought our
attention to the ground and submitted that this is the case of levy of
penalty u/s.272A(2)(k) of the Act amounting to Rs.40,000/- for delay of
400 days in filing the TDS return relating to 4th Quarter. He submitted
that assessee has duly deducted and paid the TDS to the Govt. within
the prescribed time but there was delay in filing the return. Giving the
reasons for delay, assessee submitted that during the year under
consideration the company was going through huge financial problems
and there were delay in payment of salaries as such there was a
substantial turnover of staff including the accounts department and the
company was left out with only one accountant who had gone on leave
on account of her illness and therefore, there was delay in filing the TDS
return. He submitted that the delay in filing the TDS statement does not
involve any revenue loss and is merely a technical default. Ld. Counsel
for the assessee submitted that AO levied the penalty without
considering the reasonable cause given by the assessee.
Further also, Ld. Counsel for the assessee submitted that this is a
covered issue in favour of the assessee by virtue of decision of the Pune
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Bench of the Tribunal in the case of Nav Maharashtra Vidyalaya Vs.
Addl.CIT (TDS), Range, Pune and others in ITA No.832/PN/2016 &
others, dated 07-10-2016 for the A.Y. 2011-12 and submitted that, the
reasons for delay since common, the said decision of the Tribunal apply
to the facts of the present case. Ld. Counsel also filed the copy of said
order of the Tribunal.
Ld. DR for the Revenue heavily relied on the orders of the AO and
the CIT(A).
We heard both the sides and perused the orders of the Revenue as
well as the decision relied on by the Ld. Counsel for the assessee on the
issue under consideration. On perusing the facts of the case, we find
this is a case where the assessee remitted the TDS in time and however,
there was a delay of 400 days in filing the TDS return for 4th Quarter.
There is no dispute on the fact that the assessment year under
consideration is A.Y. 2011-12. The case of the Revenue is that the
reasonable cause specified in the provisions of section 273B of the Act is
not applicable to the penalty levied u/s.272A(2)(k) of the Act. In this
regard, we have perused the relevant provisions and find the authorities
are not correct in interpreting the said provisions as there is no reference
to section 272A(2)(k) in the section 273B of the Act. We also find the
reason stated by the assessee before the CIT(A) that the delay in filing
the TDS return is due to financial stringency of the company on one side
and illness of Accountant of the Company on other side which are found
to be reasonable causes.
9.1 Further, we find the Pune Bench of the Tribunal in the case of Ajay
Narayanrao Sayalkar Vs. JCIT in ITA No.715/PUN/2016, dated 25-01-
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2018 for the A.Y. 2011-12 had an occasion to decide similar issue and
granted relief to the assessee as per the discussion given in Para No.8 of
the order. While allowing the appeal of the assessee, the Tribunal
followed the consolidated order of the Tribunal in the case of Nav
Maharashtra Vidyalaya Vs. Addl.CIT (TDS), Range, Pune and others in
ITA No.832/PN/2016 & others, dated 07-10-2016 for the A.Y. 2011-12.
Therefore, we find it relevant to extract the operational para of the
Tribunal in the case of Ajay Narayanrao Sayalkar Vs. JCIT (supra) here
as under :
“8. The case of the assessee before us is that the delay in submission of e-TDS return was because of the problem of awareness of Return Preparation Utility, which was updated by NSDL in the first year, i.e. assessment year 2011-12. Because of the requirement of e-TDS furnishing of TDS statement arising for the first time in assessment year 2011-12, there were problems faced by the assessee and hence, the delay in filing quarterly TDS return late. We hold that the assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B of the Act, we hold that the assessee is not liable to levy of penalty under section 272A(2)(k) of the Act. Hence, the Assessing Officer is directed to delete the same.”
We find it is not the case of the Revenue that the assessee is a habitual
defaulter in filing the TDS returns late. Since the facts of the present
case are similar to the one adjudicated by the Tribunal, we hold that
assessee is not liable to penalty u/s.272A(2)(k) of the Act. Accordingly,
the ground raised by the assessee is allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on 19th day of September, 2018.
Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER
पुणे / Pune; िदनांक / Dated : 19th September, 2018. Satish
5 ITA No.1124/PUN/2016 Samal Construction P. Ltd.
आदेश की &ितिलिप अ(ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT (Appeals)-10, Pune. 4. The CIT (TDS), Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब#च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड& फ़ाइल / Guard File. 6.
आदेशानुसार / BY ORDER,
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.